The utilization rate consists of two parallel systems: billable rate and efficiency rate.

The billable rate measures in percent the difference between chargeable and non-chargeable hours. Chargeable hours can be billed to the customer while non-chargeable hours are not billed to the customer.

The efficiency rate measures in percent the difference between productive and non-productive hours. Productive hours are spent contributing to a specific project while non-productive hours are hours not.

The following hour types are used to define the utilization rate calculations:

  • - Equivalent to chargeable hours in the billable rate and production hours in the efficiency rate.

  • - Equivalent to non-chargeable hours in the billable rate and non-production hours in the efficiency rate.

Note Note

On fixed-price projects, hours are not chargeable even though they can be used in a calculation of the utilization rate.

  • - Calculated by adding utilization hours and burden hours, and are included in the utilization rate.

  • - Not calculated in the hour utilization rate.

  • - Defined by the company as the standard number of utilization hours for a single employee during a selected time period. These can be included or excluded when calculating the rate of utilization hours.

These hours are defined in the employee's individual time period, which is defined in the Period statusform.

You can define how project types should be calculated for both the billable and efficiency rates in the form and the form. You can define how hours for the different project types should be calculated in the utilization rate.

When calculating the utilization rate from the employee view, you can use the , which are set up in the individual employee period code in the Period codeform. You have the option to calculate with either or . However, when reporting the hour utilization rate from other views such as a project, project contract, customer record, or category, it is mandatory that you use for your calculation.


The following example shows the hour utilization rates on the different project types and the calculations used.

A company is calculating the for the month of July. There are 23 7.5 hour working days in the month and one 7.5 hour public holiday. This means that the norm hours are calculated (24 × 7.5) and then the public holiday is subtracted (180-7.5) leaving a total of 182.5 for calculation in the month of July.